Interest in Renewable Energy systems for more green energy has been growing over the past decade. However, there are big issues that come with them related to the intermittency of the sources mainly wind and solar. Due to the intermittency of renewable energy, the output is variable which could harm the grid reliability which is a key reason that halts the investment in these technologies; therefore energy storage could play a big role in load-levelling which could help the growth of renewable energy systems in the future. Compressed air energy storage (CAES) is an energy storage system which has ability to accommodate a large volume of energy (100’s MW) for a long period of time which makes it very suitable application for large-scale renewable systems. Adiabatic CAES is a type of CAES which minimizes the use of fuel by replacing most of the heat supplied from a combustion chamber by using thermal energy storage. A parametric analysis of thermal energy storage is introduced, modelled and discussed to find out best design possible for its application for CAES. The Suez area in Egypt is taken as case study in this paper for modelling the design of an adiabatic CAES system.